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Quoted Micro 29 August 2022
AQUIS STOCK EXCHANGE
Thixotropic gels manufacturer Unigel Group (UNX) joined the Access segment of the Aquis Stock Exchange. The gels are used in the fibre optic industry. There was £800,000 raised at 64p a share. The share price ended the day at 65p.
Aquis Stock Exchange has issued a disciplinary notice to Love Hemp Group (LIFE) after omitting information in a fundraising announcement in February. It was not stated that not all the cash had been received and one investor did not pay the £1.2m it was supposed to for the shares. There was no update until May, thereby creating a false impression of the cash position. The £100,000 fine has been cut to £70,000 for early settlement. Trading in the shares remains suspended following the resignation of Peterhouse as corporate adviser. The board has been strengthened. A new corporate adviser is required for trading to recommence.
Hydrogen Utopia International (LON: HUI) is planning to enter a 50/50 joint venture with AIM-quoted Powerhouse Energy (LON: PHE) to develop a plant using non-recyclable waste plastic to produce hydrogen in Poland. Hydrogen Utopia International will be allowed to recover its costs of €250,000 with a €250,000 premium. This agreement is similar to the one between the companies for the proposed Tipperary plant, which will be built on a site leased by Trifol Resources. DXSP
British Honey Corporation (BHC) hopes to report its 2021 results before the end of September. This year’s trading has been tougher and the 2022 figures will be worse than expected with revenues of £6m.
Wishbone Gold (WSBN) has secured an option to acquire the Anketell gold copper project, which is north of the company’s Red Setter project in Western Australia. The option payment is £25,000. The consideration would be £50,000 in cash and 2.17 million shares at 14.75p each.
BWA Group (BWAP) has been granted a three-year licence for Nkoteng 2 at the Nkoteng heavy mineral sands project in Cameroon. This covers an additional 60km of strike length.
Evrima (EVA) has increased its holding in Eastport Ventures to 6.85%. Eastport also owns shares in another investee company, Premium Nickel, which has confirmed that saleable nickel and copper concentrates can be produced at the Selkirk mine in Botswana.
Capital for Colleagues (CFCP) has received an initial payment of £92,629 for the disposal of the stake in The Homebuilding Centre. This is higher than the £50,000 minimum payment because of strong trading.
Watchstone Group (WTG) had cash of £10.2m and £1.8m in escrow on 19 August.
Quetzal Capital (QTZ) says investee company Tap Global Ltd has launched a Crypto-as-a-Service product. This will enable regulated banks and financial service companies to offer cryptocurrency trading services to clients.
Diesel emission reduction additives supplier SulNOx Group (SNOX) increased revenues from £18,000 to £34,000 in the year to March 2022. There was £1.07m in cash in the balance sheet, although this fell to £604,000 by the end of June 2022.
Goodbody Health Inc has become Goodbody Health Ltd (GDBY) following the redomicile to Guernsey. Trading commenced in the new entity on Wednesday.
AIM
Rail and events software and services provider Tracsis (LON: TRCS) beat forecasts in the year to July 2022. finnCap has upgraded its earnings forecast from 33.2p a share to 34.5p a share. There was a sharp recovery in the events and traffic data business, while the other businesses continue to grow. Implementations of Tracsis software continue despite the rail strikes. The full year results will be published on 9 November.
Alumasc (ALU) is selling the poorly performing solar shading manufacturer and installer Levolux to Talrus Ltd, which is owned by Rcapital, for £1. Levolux has around £1.4m in cash and that is part of the disposal. There is deferred consideration of £1m which will be paid out of the proceeds of a disposal of the Levolux business. The impairment charge for Levolux will be £14.9m, while the £2m operating loss will be reported as a discontinued activity.
Corporate finance adviser Marechale Capital (MAC) increased pre-tax profit from £246,000 to £2.56m in the year to April 2022. That was mainly down to an increase in the value of investments and warrants. Fundraisings by Future Biogas, which postponed an AIM flotation, Chestnut Group and the Burgh Island Hotel were all at a premium to Marechale’s existing holdings. There was a cash outflow from operating activities of £131,000. NAV increased from £686,000 to £3.63m, or 3.8p a share.
First Property (FPO) has sold a property in Tureni, Romania for £3.05m, which is a book profit of £981,000. That leaves one fully owned property in Romania.
Rockwood Strategic (RKW) is planning to move to the Main Market in order to improve the tax efficiency by converting into an investment trust. The prospectus should be published by 6 September and the AIM cancellation could happen before the end of September.
Aquaculture products supplier Benchmark (BMK) increased third quarter revenues by 28% to £36.3m with a particularly strong performance by the genetics division. Sales of salmon eggs were 39% higher and shrimp sales were 164% ahead from a lower base. Investment in additional capacity in Iceland and the US is beginning to pay off. In the nine months to September 2022, underlying operating profit fell from £7.3m to £5.6m.
Australia-focused explorer Artemis Resources Ltd (ARV) says no significant nickel or copper mineralisation was shown from drilling samples at the Osborne nickel prospect. The approach to exploration will be reassessed. Two drill holes at its Greater Carlow project have not shown any sign of mineralisation, but that was not a surprise. A mineral resource estimate for Greater Carlow is expected in September and new targets have been identified. Two drill holes have been completed at the Apollo target at Paterson Central and it has re-entered a previous hole to drill deeper. This is near to the Greatland Gold (GGP) Havieron project.
Greatland Gold is raising £29.7m at 8.2p a share following Newcrest Mining’s decision not to take up the option to buy a further 5% stake in the Havieron gold project in Western Australia. Greatland Gold retains a 30% stake in Havieron. The price for the 5% stake had been set at $60m and much of that cash was earmarked to pay off loans from Newcrest Mining. The money raised will help to fund Greatland Gold’s share of further drilling and development expenses at Havieron, plus providing cash for other exploration activities in the Paterson region.
Alba Mineral Resources (LON: ALBA) has agreed to acquire the 10% minority interest in the company that owns the Clogau gold mine and plans to dewater the Llechfraith mine shaft. It is also buying back a 3% net smelter return royalty leaving a 1% net smelter royalty and £72,000 of loans held by the vendor. The total cost is £400,000 in the form of 200 million Alba shares at 0.2p each, which was a 25% premium to the closing price. There are also 81.9 million warrants exercisable at 0.4p each.
Haydale Graphene Industries (HAYD) is raising £5m at 2p a share and there is going to be an open offer at the same price that could raise up to £510,000.
Education provider Malvern International (MLVN) is benefiting from a recovery in student numbers following the easing of Covid restrictions. Interim revenues were 60% higher at £2.3m. Pre-booked and delivered revenues mean that full year revenues should be at least £5.3m.
Great Western Mining Corporation (GWMO) assay results for drilling at four prospects in Nevada. Results from the 2022 drill programme will start arriving in September. The drilling was completed under budget.
MAIN MARKET
Motor dealer Lookers (LOOK) generated a 4% increase in interim revenues to £2.23bn with lower used vehicle volumes offset by higher selling prices. Underlying pre-tax profit dipped from £50m to £47.2m, although that was higher than expected. Also, there was £12.7m of government support in the previous period. Full year pre-tax profit is expected to fall from £90.7m to £67m.
Oxford Cannabinoid Technologies (OCTP) is delaying the phase I trial of OCT130401 and concentrating on its first programme, OCT461201, where a phase I trial will start in January. This means that cash will last until the fourth quarter of 2023. There should be initial results from the phase I trial before then. Karen Lowe is stepping down as finance director.
BATM Advanced Communications (BVC) reported a decline in profit in the first half of 2022 after a sharp fall in diagnostics revenues because of Covid-boosted comparisons. Networking division revenues increased. Ongoing group revenues fell from £64.2m to £57.5m.
Packaging manufacturer and distributor Macfarlane Group (MACF) increased interim revenues by 14% to £139.2m, while pre-tax profit edged up from £8.59m to £8.86m. The growth in profit came from the manufacturing division. The interim dividend is 3% higher at 0.9p a share. Net debt is £9.7m.
Andrew Hore
Andrew Hore – Quoted Micro 1 March 2021
AQUIS STOCK EXCHANGE
Incanthera (INC) says that it is prioritising discussions with two global cosmetic companies as potential partners for Sol, a sun cream that prevents skin cancer. Incanthera is also assessing the potential for using the technology to develop other products.
Sativa Wellness (SWEL) plans to raise C$4m through a placing of units at C$0.07875 each. Each unit consists of one share one-half of a warrant exercisable at C$0.105 each. The cash will provide working capital and investment for a new health screening service. Sativa has opened ten Covid-19 testing facilities. A dispute with Dragonfly Biosciences has been settled.
World High Life (LIFE) is submitting a novel food dossier to the Food Standards Agency. This is part of the move to regulation of the CBD market in the UK. The dossier includes pre-clinical results.
AfriAg Global (AFRI) intends to acquire the shares in medicinal cannabis pharma company Apollon Formularies that it does not own, and this will be classed as a reverse takeover. Shares will be issued to the Apollon shareholders. AfriAg is also raising £2.5m at 5p a share.
Arbuthnot Banking (ARBB) is selling its Tay mortgage portfolio to a subsidiary of OneSavings Bank for £53.8m, which is equivalent to 97.9% of the outstanding loans. Arbuthnot has already announced that it intends to pay a 21p a share special dividend, which replaces the 2019 dividend declared in March 2020. Arbuthnot will make a loss in 2020 so there will be no dividend.
Gunsynd (GUN) has invested £65,000 in a convertible loan issue by B2B pool betting platform Low6. Gunsynd had already invested £200,000 last December. AIM-quoted Pires Investments (PIRI) has also increased its investment in Low6. It invested a further £35,000, having also invested £200,000 at the same time as Gunsynd. Low6 is expected to float during the second quarter of 2021 and Canaccord Genuity is its broker.
Tectonic Gold (TTAU) says that the latest exploration at Specimen Hill reaffirms the drill targets and informs plans for higher density drilling, so that a resource can be calculated. Tectonic says that the Deep Blue Minerals diamonds joint venture with AIM-quoted Kazera Global Investments produced 220 carats in January. Higher grade materials will be mined during the rest of the year.
SulNOx Group (SNOX) says that Bureau Veritas has certified that SulnoxEco Fuel Conditioner complies with European standards. This means that SulNox’s products can be used for 70% of the hydrocarbon market. Management is confident that production can be scaled up.
NQ Minerals (NQMI) has signed an agreement with ASX-listed Evolution Mining for the evaluation and potential processing of lead and silver rich stockpiles at the Sunbeam project in North Queensland. Evolution has a processing plant 80km away from Sunbeam, which has stockpiles from past mining. The processing would be done on a cost and revenue share basis with NQ. This could finance further exploration. NQ says that it should qualify for the Green Economy Mark when it moves to the standard list.
Lombard Capital (LCAP) has received shareholder approval for refocusing its strategy on property investment and development.
Almon I Holding has cut its stake in Coinsilium (COIN) to below 3%. It increased its stake to 3.68% in January 2020.
Altona Energy has changed its name to Altona Rare Earths (ANR).
AIM
Trading platform operator Aquis Exchange (AQX) moved into profit last year thanks to high levels of trading on its platform. Aquis had been expected to lose money in 2020 but it is now expected to make a £200,000 profit on revenues of £11m. EU trades have been moved to the Paris operation and London has restarted trading in Swiss shares.
VR Education (VRE) continues to grow the revenues of its ENGAGE VR platform. Group revenues increased by 38%, while ENGAGE revenues rose by 550% thanks to strong demand for virtual events. The US provides significant potential. VR is still hiring additional people, although the focus is more on marketing. VR is still losing money, but the cash burn has been reduced this year. Management is targeting 100,000 monthly users by 2025.
Hormonal disease treatments developer Diurnal (DNL) says Alkindi sales in the UK and Germany grew by 29% in the first half but the timing of purchases in other markets meant that overall revenues barely increased. Chronocourt could gain European approval in March and the US regulatory pathway for DITEST, an oral testosterone formulation, has been set out. Net cash was £20.3m at the end of December 2020.
K3 Business Technology (KBT) has sold its managed services business for £14.7m. The business made a pre-tax profit of £1.2m last year, but the disposal proceeds will wipe out net debt and enable the repayment of the £3m shareholder loan due in June. There should still be more than £35m of recurring revenues.
Interim trading at transport software and services provider Tracsis (TRCS) was active and it was not far below the levels in the six months to January 2020 prior to Covid-19 becoming a factor. Revenues declined from £26.4m to £22m and management believes Covid-19 reduced the figure by £6m. New rail contracts are being won, but the lack of events hit the data and events division. Cash has improved from £17.9m to £21m.
Revenues fell by one-third at President Energy (PPC) in 2020 due to lower oil prices. President did generate $10m of free cash flow and that helped to reduce net debt. President plans to drill seven wells this year and that could increase production by one-third. Anew subsidiary, Atome, will develop hydrogen and ammonia production.
Shield Therapeutics (STX) has raised £25m at 30p a share and could raise a further £4.2m via an open offer. The cash will finance the new strategy of directly launching iron deficiency treatment Accrufer in the US.
Yew Grove REIT (YEW) has agreed a new lease for Gateway Three building, East Wall Road, Dublin with the Electricity Supply Board. The new lease lasts five years. Along with three rent reviews, this takes the increase in annual rents to €470,000 this year.
Best of the Best (BOTB) has concluded its strategic review and it has reemphasised its online strategy. finnCap has upgraded its pre-tax profit forecast to £14m.
Benchmark Holdings (BMK) increased first quarter revenues by 18% to £29m and it is on course to reduce its loss this year, prior to moving into profit in 2021-22. The advanced nutrition business contributed significant growth in the first quarter.
MAIN MARKET
Online auctions provider Auction Technology Group (ATG) raised £247.4m at 600p a share, while existing shareholders pocketed £51.5m after the over-allotment option was exercised. The company was valued at £600m. There was a 30% gain to 780p a share at the end of the first week of trading. The company is involved with three main auction markets: arts and antiques, industrial and commercial and consumer surplus and returns. It has six main auction marketplace brands and trade magazine Antiques Trade Gazette. Low double-digit organic revenue growth is anticipated for the next few years.
Town Centre Securities (TOWN) announced a 1.75p a share interim dividend, even though this is not covered by earnings. Lower car park income meant that there was a sharp decline in interim profit. The NAV was 286p a share at the end of December 2020 and it is not expected to decline by more than 2% by the year-end in June. This is more than double the current share price.
CML Microsystems (CML) is paying 50p a share to investors following the sale of its storage division. This will cost £8.28m. the cash should be received before the end of March.
Strong demand for diagnostic products more than offset weakness in the networking division of BATM Advanced Communication (BVC) and enabled 2020 revenues to grow by 49% to $184m. Pre-tax profit jumped from $5.2m to $13.6m. Revenues are expected to decline this year, but pre-tax profit is forecast to improve from $13.6m to $17.3m. This may depend on the timing of the sale of the NGSoft business and it also assumes no additional sales of ventilators this year. Longer-term, revenues will build up from virtual networking technology NFVTime. There is also potential for dividends.
Construction services provider NMCN (NMCN) says that two contracts in the water division could lead to an additional loss of £5m in 2020. These costs relate to delays. The total loss for 2020 could be up to £22m. The additional cash costs will be spread over 28 months. Shareholders are being asked to agree to an extension of the company’s borrowing limit.
Aircraft lessor Avation (AVAP) took a $46.7m impairment charge on its aircraft and a $12.9m credit loss in the six months to December 2020. The NAV was 174p a share at the end of 2020. A full year loss of $30m is expected before the exceptional write-offs.
Cannabis-based products developer Cellular Goods (CBX) raised £13m in its offer at 5p a share. The share price jumped to 19p on the first day of dealings.
Potash project developer Emmerson (EML) raised £5.5m at 5.75p a share. Emmerson has a mining licence for the Khemisset potash project in Morocco. The cash will be used for the detailed design of the mine and the phased development of the project.
Shell company Stranger Holdings (STHP) is pushing ahead with the proposed reverse takeover of the Recyclus Group. A prospectus is being drafted.
Packaging supplier Macfarlane Group (MACF) increased its 2020 profit by 10% to £13m on a 2% increase in revenues to £230m. The full year dividend has been increased from 0.69p a share to 2.55p a share.
Andrew Hore
Andrew Hore – Quoted Micro 30 November 2020
AQUIS STOCK EXCHANGE
Healthcare IT supplier DXS International (DXSP) had £1.2m in cash at the end of October 2020. Net cash was £584,000, following the capitalisation of £568,000 of development spending. Interim revenues improved by 3% to £1.72m but progress was held back by Covid-19. Pre-tax profit jumped from £90,000 to £151,000 due to lower admin costs.
Imperial X (IMPP) is continuing its due diligence on previously announced acquisitions of mining and royalty interests and the plan is to apply for a standard listing when the acquisitions are completed.
TechFinancials Inc (TECH) has invested $148,000 in RenewSenses, which has developed a wearable device for the visually impaired. The cash will help to complete the development of the A.I. Cane product, which is a camera attached to a handheld device and this enables obstacles to be identified.
S-Ventures (SVEN) has invested a further £75,000 in a convertible loan note issued by vitamin-fortified juices and smoothies Coldpress Foods. The annual interest rate is 15%. S-Ventures has a 3.3% stake in Coldpress.
Primorus Investments (PRIM) has terminated options over 17.8 million shares held by three individuals and has paid a total of £140,000 in compensation. These options could have been exercised at 6p a share or 8p a share and were equivalent to 11.3% of the potentially enlarged share capital. Primorus has decided to drop the Aquis quotation on 24 December and keep the AIM quote. This and a reduction in director pay will reduce costs by more than £200,000 a year.
Formation Group (FRM) is withdrawing from the Aquis Stock Exchange on 31 December.
Good Energy (GOOD) has appointed Canaccord Genuity as joint broker.
Vulcan Industries (VULC) has raised a further £335,000 at 5p a share and 5.5p a share.
Aquis Stock Exchange has launched a market maker incentive scheme. The market makers will offer two-way prices for 505 of stocks on the Apex segment with a maximum spread of 5%. There should be 25 companies on the Apex segment. Market makers will receive warrants for shares in the Aquis Stock Exchange with the best performers gaining the largest percentage. They could earn up to 19.9% of the market over a three year period. Early adopters include Canaccord Genuity, Liberum, Peel Hunt, Shore Capital, Stifel and Winterflood.
Liberum Capital and Zeus Capital have been approved as corporate advisers for the Aquis Stock Exchange.
AIM
Kistos (KIST) began trading on AIM on 25 November. The investment company raised £30.2m after expenses and the market capitalisation was £40.3m. The plan is to seek acquisitions in the oil and gas sector. The team behind Kist is the same as for RockRose Energy. The share price has risen from 100p to 118.2p.
Cyber security software and services provider Shearwater (SWG) reported a slump in revenues, but the decline was in lower margin products. There were also overhead reductions. That meant that there was a profit before amortisation of acquired intangibles. Orders were delayed but there was still a £1.7m cash inflow from operations. Net cash was £3m at the end of September 2020. Two-fifths of revenues are recurring, and the long-term outlook is good.
Circle Property (CRC) reported a 2p a share decline in NAV to 283p a share at the end of September 2020. Loan to value is 42% and there is £37.7m of a loan facility still undrawn. New lettings have been secured since March and rent collections have been strong. The interim dividend is 2.5p a share.
Telecoms testing instrumentation supplier Calnex Solutions (CLX) has made an impressive start to its time on AIM with interim figures that show near-doubled underlying pre-tax profit of £2.3m. This has led to an upgrade of the full year profit expectations to £2.9m. The cash being generated is enabling additional development spending.
IG Design (IGR) benefitted from a full contribution from the CSS acquisition, which has also reduced the seasonality of the group. Even so, continuing operations sales held up well. There is still scope for additional demand for Christmas wrapping and gift products, but time is running out for any significant improvement. Full year pre-tax profit is expected to be flat at $35m, although shares issued to fund the CSS acquisition mean that there would be a one-fifth decline in earnings per share to 25.5 cents. There should be a significant improvement next year.
First Property (FPO) has significantly reduced its debt following the sale of a property in Poland. This puts it in a good position to take advantage of any opportunities over the next year or so. Short-term income has declined and there were no performance fees. NAV is 54.3p a share. The interim dividend is maintained at 0.45p a share.
Appreciate (APP) has reinstated its dividend and it proposes an interim of 0.4p a share. Interim revenues were 18% lower at £27.4m. There is always a first half loss and it increased from £1.2m to £4.6m, although that does not include the restructuring costs. The Christmas savings business held up and the corporate incentives operations were boosted by additional business due to free school meals vouchers. More business is being done digitally and there continues to be a monthly improvement in trading.
D4T4 (D4T4) is continuing its development into a business focused on recurring revenues. The data collection and analysis software provider lost money in the first half, but management remains confident that D4T4 will achieve the full year pre-tax profit forecast of £3.2m, down from £5m. Net cash is expected to be £14m. The interim dividend was raised by 5% to 0.81p a share.
LoopUp (LOOP) has not achieved the annual run rate than it expected, and it will fall short of 2020 expectations. The remote meetings technology provider has been generating less revenue from international calls, which has hit overall revenues. Trimming the 2020 revenues forecast from £54.8m to £50.1m leads to a one-fifth reduction in pre-tax profit to £8.4m. The lower run rate means that 2021 forecast revenues have been slashed from £56m to £35.2m, which leads to a small loss for the year.
Outsourcing Inc has sent out the document for the takeover of CPL Resources (CPS). It is offering Euro11.25 a share, which values the Ireland-based recruitment company at Euro317.8m.
Digital advertising technology developer Miriad Advertising (MIRI) has raised £23m via a placing at 40p a share. A further £3m could be raised via an open offer. In July 2019, £16m was raised at 15p a share. The first half cash outflow was more than £4.6m. The cash will be spent on growing US revenues and further technology development.
Ilika (IKA) has decided to manufacture its Stearex batteries itself rather than outsourcing the process. This is the quickest route to production and operating margins will improve. Full scale manufacturing will start by early 2022.
ReNeuron (RENE) is raising up to £17.5m at a heavily discounted share price of 70p. This cash will enable the company to complete the current clinical trial for the retinitis pigmentosa treatment and design a phase III trial.
The share price rise of Wynnstay Group (WYN) has led to DBAY Advisors reducing its stake from 6.12% to 5.33%.
Urban Exposure (UEX) plans a tender offer of up to £65m at 75p a share. There is cash in the bank of £81m.
Second half trading was always going to be weak for Tracsis (TRCS) because of its exposure to events in the traffic and data division. Recurring revenues from the rail technology division have helped limit the pre-tax profit decline from £9.5m to £8.3m. This year is also likely to be tough, although it will depend on trading next summer. The main recovery is likely in 2021-22.
Serinus Energy (SENX) has raised $21m and this will pay off the debt of $16.5m. The lender will also receive a 9.9% stake. The rest of the cash will be invested in increasing oil and gas production.
Digital financial services and products provider Tungsten (TUNG) says profit will be lower than expected this year. Transaction volumes have declined, and revenues will be flat. Winning new business has become more difficult. Annualised savings of £4m are being made.
Michelmersh Brick (MBH) says that 2020 revenues and profit will exceed expectations. Government support of £500,000 will be repaid. There will still be net cash at the end of 2020. A final dividend of 2.25p a share will be paid.
Benchmark (BMK) has completed its restructuring and is on course to benefit from the investment it has made in products and capacity. The BMK08+CleanTreat treatment should be launched by next summer and this could help the aquaculture company to move into profit. In 2019-20, revenues fell from £124m to £105.6m, but lower costs meant that the loss was reduced. Genetics was the best performing division due to initial sales of salmon eggs from Salten. Net debt was £37.6m at the end of September 2020.
MAIN MARKET
Jlen Environmental (JLEN) is paying a second quarterly dividend of 1.69p a share, the same as the first quarter. There has been a small reduction in NAV from 97.5p a share to 96.1p a share because long-term expectations for electricity and gas prices have fallen. The portfolio is 34% wind power, 27% anaerobic digestion, 22% solar power, 15% waste and wastewater and 2% hydro and battery. A decline in waste volumes hampered the Bio Collectors business and other feedstocks are being sourced. There is £127.6m available to finance further acquisitions.
CML Microsystems (CML) had a mixed interim period with total revenues holding up at £12.9m. Storage technology revenues were one-quarter higher, but communications revenues fell by one-fifth and are no longer the largest contributor. However, the development activities have been broadened through acquisitions and there is a bigger addressable market. Pre-tax profit fell from £907,000 to £771,000 and the interim dividend is unchanged at 2p a share. The second half should be better than the first half and a rebalancing of resources should make the business more efficient.
Ingredients supplier Treatt (TET) improved pre-tax profit from £14m to £15.8m, although there was a small dip in revenues to £109m. The total dividend is 6.2p a share. Demand is likely to remain weaker than normal. The move to the new UK premises should happen in the middle of 2021.
J Smart Contractors (SMJ) reported halved underlying full year pre-tax profit of £1.28m. There was a surplus on investment property revaluations of £3.18m. There is net cash of £12m. A final dividend of 2.27p a share has been declared and the total for the year has edged up from 3.19p a share to 3.22p a share. The completion of building contracts has been delayed due to Covid-19 restrictions. Contracting work remains below the level of the previous year and private housing sales will be limited in the year to July 2021. NAV is £99.3m, which is double the market capitalisation.
Triad (LSE: TRD) revenues declined from £9m to £8.7m, but the IT consultancy did move from loss to profit due to lower costs. Utilisation rates for IT consultants is relatively high and cash covers around three-fifths of the market capitalisation.
Gulf Marine Services (GMS) has suspended chief executive Tim Summers, who was no longer a member of the board, due to an investigation into a severance payment of £429,000 on 10 November. Hassan Heikal was appointed a director at the general meeting on 25 November.
Cardiff Property (CDFF) increased its NAV from 2285p a share to 2436p a share at the end of September 2020, against a share price of 1725p. This reflects an uplift in the valuation of JV Campmoss due to an increase in value of Clivemount House in Maidenhead which has been sold since the year end. The dividend increased by 3% to 17.6p a share. There is cash of £5.5m and no debt.
Affordable housing services provider Aquila Services Group (AQSG) reported a decline in revenues from £3.89m to £3.51m, although there was a small improvement in operating profit prior to restructuring costs of £175,000. The dividend has been halved to 0.15p a share. Cash has increased to £1.4m.
OTAQ (OTAQ) increased interim revenues by 16% to £2.03m and it is on course for full year revenues of £4m. The growth has come from the aquaculture operations. Furlough claims reduced the loss.
Andrew Hore – Quoted Micro 28 January 2019
NEX EXCHANGE
Full year figures from AFH Financial Group (AFHP) show how successful its acquisition strategy is with revenues 51% higher at £50.7m and pre-tax profit that nearly doubled to £6m. Despite the additional shares issued to part-finance these acquisitions, underlying earnings per share were one-third higher. The dividend is 50% higher at 6p a share. Acquisitions have continued since the year end. Management believes that it can double funds under management to £10bn in three to five years.
Startup Giants (SUG) has commenced a programme to raise up to £3m. There will be an initial share placing to raise £200,000. The company has launched its 2019 accelerator round for pre-seed capital tech entrepreneurs. Funding of up to £100,000 can be received by successful applications.
KR1 (KR1) has invested $200,000 in Rlay, a data collaboration framework for crowdsourcing. KR1 will receive an undetermined number of discounted tokens. This will be a discount to the lowest price paid by any investor in the tokens. KR1 has spent £50,000 in 50,000 Nash tokens. These are the first tokens issued out of Liechtenstein.
MiLOC Group Ltd (ML.P) has signed a deal with Master Kingdom Ltd in order to create a range of body care and body wash products, which will be sold under the Artist’s brand name.
MetalNRG (MNRG) says that the Kyrgyzstan authorities have granted the application for a mining licence for the company’s uranium project in the country. The in-situ value of the uranium reserves is $253m and there is potential exploration upside.
Johnny Martin Smith is joining the board of VI Mining (VIM) and trading in the shares has resumed. Smith is a former mining analyst.
NQ Minerals (NQMI) has raised a further £142,000 at 11p a share. Bryan Smart has resigned from the board.
BWA Group (BWAP) had nearly £45,000 left in the bank at the end of October 2018. Elections have delayed progress with the potential licence acquisitions for rutile sands deposits in Cameroon. Investee company Prego International is moving from Guernsey to Norway and it may merge with another business.
Milamber Ventures (MLVP) is seeking a replacement for First Sentinel Corporate Finance as its corporate adviser.
AIM
Mporium (MPM) has signed a partnership deal with claims management firm Allay, which will use the company’s technology to generate leads for its business. Allay will be issued a 25% stake in Mporium in return for the revenuesthat will be generated, which could be worth millions of pounds. The stake could be increased to 29.9% if Mporium is successful in winning leads for Allay.
Mastercard has launched a rival bid for Earthport (EPO) and Visa is considering its position. The new bid is 33p a share and this values the company at £233m. That is a 10% premium to the Visa bid.
Aquaculture business Benchmark (BMK) has expanded its production capacity and is launching new products. Revenues were 8% higher at £151.5m and it would have been higher at constant exchange rates. It made an underlying pre-tax profit of £5.6m last year, up from £4.7m, and that could nearly double this year. Net debt was £55.7m.
Sureserve (SUR) has been restructured and non-core businesses sold. This enables it to concentrate on compliance and energy support services. Full year revenues from the continuing operations were 5% higher at £191m and underlying pre-tax profit improved from £5.4m to £6.6m. This was better than expected and net debt was £11.4m. The dividend has been halved to 0.25p a share.
K3 Capital (K3C) was expected to report lower figures in the first half due to the timing of larger corporate finance deals and the mergers and acquisitions achieved interim revenues 4% lower at £7.2m and an even larger decline in profit. The second half should be better and revenues could be slightly higher than last year at £16.6m, but full year pre-tax profit is forecast to fall from £7.3m to £7m.
Wynnstay Group (WYN) reported record full year results. The higher milk price has led to increased demand for dairy feed. Revenues grew from £390.7m to £462.7m and pre-tax profit moved from £7.9m to £9.5m. The agriculture and retail divisions both improved their profit and the latter added additional sites in the second half that were not profitable in the period. There was the normal second half cash inflow but it was not as great as in the past, so net debt was nearly £1m. The dividend has been raised 6% to 13.4p a share.
InfraStrata (INFA) has raised £1.5m at 1.2p a share. This will boost its balance sheet while it negotiates with investors in the Islandmagee gas storage project. One equity investor has appointed advisers to do due diligence work. The project will continue to progress as these negotiations continue and the cash will make sure that progress is made while the final funding package is secured.
Lighthouse Group (LGT) has secured a deal to transfer the members and assets of its pension trust to Smart Pensions Ltd. The IFA will protect itself from the rising cost of the administration and capital requirements of pension trusts.
Audioboom (BOOM) grew last year’s revenues by 92% to $11.7m, although this was a 13 month period, and it says that there was no cash outflow from operations in the final three months. That meant that there was $1.6m in the bank at the end of 2018.
Robinson (RBN) traded in line with expectations last year. The packaging manufacturer expects revenues of £32.8m, which is a 10% improvement. The fastest growth was in Poland. Even so, pre-tax profit will be lower, but it should bounce back in 2019.
A large localisation project has been cancelled and this will hamper the progress of Zoo Digital (ZOO) in the second half of its financial year. The legacy DVD business is also declining faster than anticipated. This means that ZOO will not be profitable in the year to March 2019.
Velocity Composites (VEL) increased its full year revenues by 15% to £24.5m, and there was a small loss, but business wins are slower than previously hoped. Revenues could be flat this year.
Another upgrade for audio visual products distributor Midwich Group (MIDW) following its latest trading statement. Pre-tax profit is expected to rise from £24.3m to £29.1m and then a further increase to £31.7m in 2019.
MAIN MARKET
Robin Boyle has failed to get back on the board of Athelney Trust (ATY) but he was successful in removing the existing directors. David Lawman and Paul Coffin were appointed although the latter resigned at the end of the week and he was replaced by Frank Ashton. The proposed tender offer and placing was also passed.
Dev Clever Holdings (DEV) is the latest company to float on the standard list. A share issue has raised £898,000 at 1p a share, including £220,000 due to the conversion of debt. The software development company was valued at £3.73m. The share price ended the week a 7.75p.
Nanoco (NANO) has signed a contract extension with a US company and this lasts until the end of 2019. This underpins the current year forecast.
Ross Group (RGP) has issued the final 21.3 million shares for the acquisition of Archipelago Aquaculture, which plans to start producing Chitin to help to produce quality shrimp. The deal was announced last September, and 17.9 million shares were issued at 1p a share. Global Blue Technologies Inc owns 19.9% of Ross.
Interim figures from Haynes Publishing (HYNS) show a 23% increase in underlying pre-tax profit to £1.6m on a 7% rise in revenues to £18.3m. Digital revenues were 23% higher at £9.7m. The growth in revenues and profit was in the UK and Europe. The interim dividend is unchanged at 3.5p a share. Net cash was £2.6m.
Andrew Hore
Buy Benchmark Holdings #BMK says VectorVest. There is every sign that the company is developing into a highly investible proposition.
UK based Benchmark Holdings (BMK.L) challenges the status quo in aquaculture. Since 2000, BMK has consistently worked to build a technology-rich platform in the areas of genetics, advanced nutrition, animal health and knowledge services, to serve its customers, helping them to improve yield and efficiency in a sustainable way. The Company has leading positions in its core markets and established R&D, manufacturing and distribution capabilities to serve all the major aquaculture markets. BMK operates in 27 countries globally and employs 950 people.
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On June 19th2018, BMK published interim results for the six months ended 31 March 2018. The Company reported a 91% increase in adjusted EBITDA to £6.3m on revenues 9% higher at £75.7m. An £8.2m loss for the same period last year turned into a £3.6m profit, driven by improved trading, a reduction in finance costs and a £9.2m tax credit resulting from a reduced deferred tax liability on intangibles from the acquisition of INVE. CEO Malcolm Pye said the results showed “good organic revenue growth and improving profitability on an adjusted basis, while we continue to invest in our pipeline of new products and infrastructure.” “The outlook for the Group is positive as the drivers for our business are stronger than ever before, with continued growth in aquaculture and increasing recognition from consumers, producers and regulators of the need for sustainable solutions to enable future growth.”Separately on Sept 10th2018 BMK announced the commencement of production of salmon eggs at its new land based breeding facility in Salten, Norway. The centre is the World’s most advanced egg facility, and increases Benchmark’s capacity by 75%.
Since the end of May 2018, BMK has consistently flagged a high Relative Value (RV) reading to VectorVest members. The RV metric is an indicator of long-term price appreciation potential, and even today continues to log BMK at 1.47, excellent on a scale of 0.0 – 2.0. Added to this the company logs a GRT (Earnings Growth Rate) of 32%, which also rates as excellent on the VectorVest stock and portfolio management system. Cautious investors may decide to look elsewhere given that BMK offers a ‘fair’ RS (Relative Safety) rating of 1.00, again on a scale of 0.00 to 2.00, but trading today at 62p, BMK still offers plenty of upside against a current VectorVest valuation of 81p.
The chart of BMK.L is shown above using weekly candlesticks. The share is undervalued and has recently broken upwards from a five-wave symmetrical triangle of two years duration. The first technical target from the triangle breakout is around 100p.
Summary: VectorVest has this week identified another niche sector operator, with leading positions in core aquaculture markets around the globe. This acquisitive operator has completed several notable acquisitions in the past few years, and significantly in the first half turned a loss into a profit on higher revenues. While the low RS metric may deter the more cautious investor, there is every sign that BMK is developing into a highly investible proposition given its global footprint, not to mention the opening of the World’s most advanced salmon egg facility and consequential increase in capacity. Coupled with the recent bullish charting signals, VectorVest recommends the stock as a buy
Dr David Paul
September 19th 2018
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